Cigar Lounge Business Plan and SWOT Analysis

Cigar Lounge Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Cigar Lounge Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Cigar Lounge business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

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Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Over the past 20 years, cigar lounges have become very popular among both men and women typically under the age of 40. These businesses are able to generate high-margin revenues not only from the sale of cigars and other tobacco products but also from the sale of alcohol is as well. Some cigar lounges often offer a small selection of food although this is somewhat limited given that many people are smoking within the facilities. The startup costs associated with the new cigar lounge are typically considered to be moderate for this type of business. An entrepreneur looking to enter this field can generally expect the startup cost anywhere from $100,000 to $200,000 depending on whether or not a liquor license is going to be required. It should be noted that the cost associated with the acquisition of a liquor license can vary greatly by state. The gross margin generated from tobacco products typically is around 80% as is the sale of alcohol if it is going provided on the premises.

A cigar lounge SWOT analysis is generally developed as well in tandem with a business plan and marketing plan. As it relates to strengths, cigar lounges are generally able to always remain profitable given the substantial gross margins generated from tobacco and alcohol sales. They do not typically face a substantial amount of competition in most markets given the fact that cigar smoking is somewhat on the decline given that people are concerned about their health and understand the risks related to smoking a cigar. One of the ways that this can be remedied is by offering a number of aping products on the premises as well.

For weaknesses, these businesses generate the bulk of their revenues during the weekend hours and can have very high operating expenses. This is especially true in major metropolitan markets where retail space is a limited commodity and rental expenses very high.

For opportunities, many cigar lounges expand their operations by establishing new locations while concurrently offering ongoing promotions and discounts in order to drive people to the location. One of the ways that some of the risks associated with operating his business can be further stymied is by maintaining expansive tobacco store section where people will come in on a regular basis to purchase these products.

For threats, there’s really nothing moving forward that is going to impact the way that these companies do business. Cigar lounges remain popular, and the regulations that involve owning and operating a retail location that involves the smoking of tobacco have already been established. As such, entrepreneurs enter this market will be able to enjoy strong barriers to entry and a strong demand at all times.

A cigar lounge business plan should be developed as well in order to secure capital either from a bank or from a private investor. As with all business planning documents, a three-year profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page should be included. Cigar lounges generate about $1 billion per year among 1,000 established locations within the United States. The industry employs about 5,000 people.

Also within the business plan, a thorough demographic analysis as well as a competitive analysis among other cigar lounges should be included as well. The demographic analysis should include statistics pertaining to population size, population density, percentage of people under the age of 40, median household income, median household net worth, and other relevant statistics to the local market. In any given market there are usually only a handful of companies that operate in the cigar lounge capacity, although it is still important to examining other bars and restaurants that provide patrons with a similar experience. The competitive analysis can be done on a modest basis for this type of company.

A cigar lounge marketing plan also needs to be developed in order to ensure that traffic is driven to the location at the onset of operations. Foremost, many cigar lounges maintain a standalone section of their facilities that allows them to just sell tobacco to the general public. This allows customers to become familiar with the offerings of the business as they come in to buy cigars, cigarettes, of aping products, and other tobacco products. Once a customer learns that the business operates in a cigar lounge capacity during evening hours and during the weekend – they are more likely to return in order to use the place as a social outlet.

An expansive online presence should be also included as part of the cigar lounges overall marketing strategy. The company’s standalone website to showcase the hours of operation, whether or not the location serves alcohol, tobacco and cigar inventories carried, preliminary pricing information, and general contact information. Some cigar lounges do maintain a moderate amount of e-commerce operations specific for the sale of tobacco products. However, given that there are a number of different state laws pertaining to the minimum age in which tobacco can be purchased – some cigar lounges stay away from doing this given the legal liabilities associated with this type of operation. It should be noted that integrating e-commerce functionality into this type of website typically cost anywhere from $500 to $1,000 depending on the special features that the owner wants.

Many new cigar lounges also use social media in order to promote their operations. This includes use of FaceBook, Twitter, LinkedIn, and Instagram. As more and more people attend the cigar lounge offense and use it as a social outlet, they will continue to post pictures onto their social media accounts. As such, by maintaining a social media presence individuals can tag images of the location as they enjoy it. This is an important avenue of marketing as well given the fact that once the following is established specialized deals, discounts, and coupons can be shown to customers.

For entrepreneurs that have a strong understanding of how bars work, a cigar lounge can be a unique business in most metropolitan area markets that has an ongoing demand among consumers that like tobacco products. These businesses always generate high-margin revenues from the sale of tobacco products, alcohol, and small food items. These are exciting businesses to own and operate especially among entrepreneurs that enjoy operating businesses that primarily operate on a nighttime basis.

Cigar Lounge Business Plan (text of the plan – sample images only)

1.0 Executive Summary

The purpose of this business plan is to raise $100,000 for the development of a cigar lounge while showcasing the expected financials and operations over the next three years. Cigar Lounge, Inc. (“the Company”) is a New York based corporation that will provide sales of cigars and other related products to customers in its targeted market. Customers will be free to smoke cigars in the lounge areas of the shop. The Company was founded by John Doe.

1.1 The Operations

The primary revenue centers for the Company will come from the sale of cigars, specialty cigarettes, and related items. Mr. Doe is currently sourcing a number of wholesalers and manufacturers that will be able to provide the Company with an extensive line of products for sale to the Company’s targeted demographic of people living within the target market. As stated above, customers will be free to enjoy tobacco products directly at the location.

The Company will also maintain an expansive online sales platform.

The third section of the business plan will further describe the services offered by the Cigar Lounge.

1.2 The Financing

Mr. Doe is seeking to raise $100,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following:

  • Development of the Company’s Cigar Lounge location.
  • Financing for the first six months of operation.
  • Capital to purchase inventories of cigars and accessories.

Mr. Doe will contribute $10,000 to the venture.

1.3 Mission Statement

Cigar Lounge’s mission is to become the recognized leader in its targeted market for providing an extensive line of domestic and imported cigars.

1.4 Management Team

The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the retail management industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations

1.5 Sales Forecast

Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

1.6 Expansion Plan

The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to implement marketing campaigns that will effectively target individuals within the target market.

2.0 Company and Financing Summary

2.1 Registered Name and Corporate Structure

Cigar Lounge, Inc. The Company is registered as a corporation in the State of New York.

2.2 Required Funds

At this time, the Cigar Lounge requires $100,000 of debt funds. Below is a breakdown of how these funds will be used:

2.3 Investor Equity

Mr. Doe is not seeking an investment from a third party at this time.

2.4 Management Equity

John Doe owns 100% of the Cigar Lounge, Inc.

2.5 Exit Strategy

If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Cigar Lounge. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.

3.0 Products and Services

3.1 Sales of Cigars and Accessories

As stated in the executive summary, the Company intends to acquire a substantial amount of retail sale of cigars and related accessories which it will sell through its retail store and online sales platform. Management expects that the business will generate gross margins of 68% on each item sold by the Company.

One of the primary differentiating factors for the business will come from the fact that the Cigar Lounge will allow customers to enjoy tobacco products directly at the location. The business, within its first three years of operation, may seek to obtain a liquor license so that customers can enjoy alcoholic beverages while smoking cigars at the facility. This would substantially boost the revenues of the business.

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the cigar retailing industry, the customer profile, and the competition that the business will face as it progresses through its business operations.

Currently, the economic market condition in the United States is in a state of moderate growth. Unemployment rates have declined while asset prices have risen substantially. However, the Cigar Lounge will be able to remain profitable and cash flow positive at all times given the low costs associated with this business.

4.2 Industry Analysis

The aggregate sale of cigars and specialty cigarettes in the United States is a $2 billion a year business. As of the last economic census, the industry employed more than 18,000 people working among 2,000 retail establishments.

This is a mature industry, and the excepted future growth rate of the industry will remain in lockstep with that of the general economy.

4.3 Customer Profile

The Cigar Lounge’s average client will be a middle to upper middle class male living in the Company’s target market. Common traits among clients will include:

  • Age range  21 to 60
  • Predominantly Male
  • Household income of $30,000+ per year

4.4 Competition

This is one of the sections we discuss in the purchased document.

5.0 Marketing Plan

The Cigar Lounge intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Cigar Lounge.

5.1 Marketing Objectives

  • Develop an online presence by developing a website and placing the Company’s name and contact information with online directories.
  • Implement a local campaign with the Company’s targeted market via the use of flyers, local newspaper advertisements, and word of mouth advertising.

5.2 Marketing Strategies

Mr. Doe intends on using a number of marketing strategies that will allow the Cigar Lounge to easily target its demographics within the target market. These strategies include traditional print advertisements and ads placed on search engines on the Internet. Below is a description of how the business intends to market its services to the general public.

The Cigar Lounge will also use an internet based strategy. This is very important as many people seeking local retailers, such as cigar lounges, now the Internet to conduct their preliminary searches. Mr. Doe will register the Cigar Lounge with online portals so that potential customers can easily reach the business. The Company will also develop its own online website, which will feature e-commerce functionality so that the business can generate sales from outside of its retail location.

The Company will maintain a sizable amount of print and traditional advertising methods within local markets to promote the cigars and related products that the Company is selling.

6.0 Personnel Summary

7.0 Financial Plan

7.1 Underlying Assumptions

The Company has based its proforma financial statements on the following:

  • The Cigar Lounge will have an annual revenue growth rate of 8% per year.
  • The Owner will acquire $100,000 of debt funds to develop the business.
  • The loan will have a 10 year term with a 9% interest rate.

7. 2 Sensitivity Analysis

In the event of an economic downturn, the business may have a decline in its revenues. Cigars are non-essential items, and as such, customers will have less discretionary income to purchase these goods in an economic recession. However, the high gross margins generated from sales (both retail and online) will ensure that the Cigar Lounge can remain profitable and cash flow positive in any economic climate.

7.3 Source of Funds

7.4 Profit and Loss Statement

7.5 Cash Flow Analysis

7.6 Balance Sheet

7.6 Breakeven Analysis